Sniping isn't bad for sellers at all. Every bid benefits a seller.

The problem again is buyers who do not understand the proxy bidding system and thus do not bid the highest they are willing to pay.

If each bidder understood that and acted accordingly the Seller would get the same amount of money no matter when the bid was entered. (not factoring the fact that some bidders may not bid on an item due to a relationship to the high bidder).